RBA Gov. Glenn Stevens said in his statement accompanying the decision that the currency remained at a relatively high level “given the observed decline in export prices and the weaker global outlook.”

Traders pushed the Australian dollar higher due to hints from Stevens that policy may be on hold for a while going forward, said RBC currency strategist Sue Trinh.

“The accompanying statement was hawkish, with the RBA dropping the phrase ‘for the time being,’ and there was also no reference to ‘further easing may be appropriate in the period ahead,’ which was in the November minutes,” Trinh said.

The RBA isn’t due to meet again until February.

“As the RBA does not meet in January, there is clearly a lot that can happen in between now and the next meeting, and so although we are not forecasting a cut in February at the moment, we are cognizant that the RBA will be firmly in data watch mode,” said Christian Lawrence, currency strategist at Rabobank International in London. “Furthermore, the resilience of [the Australian dollar] is likely to play a role too, given that a selloff would act as a de facto easing of monetary policy.” Read about U.S., Australian bond outlook.

Canada, Europe

Another major central bank met Tuesday and kept benchmark rates steady: the Bank of Canada. The U.S. dollar turned down after the announcement, lately falling about 0.2% to buy 99.30 Canadian cents. Read Bank of Canada’s policy statement.

The European Central Bank and Bank of England also meet later this week.

Falling bond yields in Spain and Italy make it less likely that the ECB cuts rates this week, said Kathleen Brooks, research director at Forex.com.

“That is helping to keep the euro supported, especially versus the dollar as the [U.S. Federal Reserve] is expected to reiterate its highly accommodative monetary stance at its meeting next Wednesday,” she said.

The euro
EURUSD, -0.06%
rose to $1.3103 from $1.3054 late Monday. It briefly topped $1.31, a level it hasn’t closed above since mid-October, according to FactSet.

Trinh said the European currency was receiving support from the kickoff of Greece’s bond buyback program, meant to cut the nation’s debt load and comply with requirements for its next aid payment.

Australian 100 dollar notes.

The euro “has held on to the bulk of its recent gains…[and] pullbacks since the announced Greek buyback deal have been shallow. Our interpretation of the deal is that it has been designed to succeed, and thus Greece will get the formal nod of approval for disbursement of aid for the Eurogroup,” Trinh wrote in a note to clients.

BK Asset Management managing director Kathy Lien saw possible upside for the unit, depending on what happens in the debt market, suggesting “traders should keep eyes on European bond yields and the [euro’s] five-month high at $1.3170.”

Among other major currency pairs, the Japanese yen rose modestly, with the dollar
USDJPY, -0.34%
slipping to ¥81.83 from ¥82.19.

The British pound
GBPUSD, +0.01%
traded at $1.6107 compared with $1.6092 late Monday.

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